A local company is close to taking a major step toward bringing an innovative heating system to downtown Juneau.

Juneau District Heating, which seeks to bring renewable hydropower heat to downtown Juneau, is on the verge of finishing a deal with the Alaska Mental Health Trust Authority to take control of a parcel of land across Egan Drive from the Juneau Arts and Culture Center.

Trust Authority spokesperson Carley Lawrence said Wednesday that the property is “close to closing,” as the Trust Land Office is tying up loose ends and will soon sign the documents to make the sale final. Operating as Develop Juneau Now LLC, JDH President &CEO Comstock agreed late last year to buy the land for $1.3 million.

The land, which is currently a fenced-in parking lot, will house Juneau District Heating’s facility that plans to pump heated water through pipes downtown to heat the buildings. (The land in question is in a different spot than the homeless camp and is unrelated to those issues there.)

JDH Managing Director Duff Mitchell said the sale of this property serves as a vital checkpoint in the process of making the business a reality.

“It’s a pretty big step because right now we’ve been doing designs and pipe routing and easements and a lot of work that’s basically at risk,” Mitchell said. “Until you have the property and have the right title and interests, there’s an element of risk there that something would go awry in the sale process. This is a major milestone.”

The vision for JDH is for a hydropower facility on that property to take seawater from Gastineau Channel and heat it up, then sending the water through insulated pipes that then heats buildings downtown. The system will then send the water back to the facility to be heated again and then redistributed. European cities such as Copenhagen have used this approach, and have reduced emissions due to the elimination of fuel-burning heating systems. Comstock and Mitchell hope the same effect happens in Juneau, where many companies still use fuel-burning heating systems.

Mitchell, along with Comstock, began this endeavor in 2012. The two of them own Juneau Hydropower, where they are looking to build a hydropower facility at Sweetheart Lake (33 miles south of Juneau). That facility has yet to be built, but the Federal Energy Regulatory Commission (FERC) issued Juneau Hydropower a permit to construct the facility.

District heating wouldn’t compete with Alaska Electric, Light &Power (AELP), as the electric utility provides electric service to the downtown businesses but they each are responsible for their own heat. AELP Director of Energy Service Alec Mesdag explained that the two operations would be providing very different services.

“The district heating system would not compete with us because we’d be selling different products,” Mesdag said. “We’d both be selling forms of energy, but they would be selling heat and we’d be selling electricity.”

Both AEL&P and JDH are harnessing hydropower, which is becoming more and more popular in Alaska. According to the Alaska Energy Authority, hydropower is the state’s largest source of renewable energy, supplying more than 20 percent of the state’s electrical energy.

District heating is still a long ways from becoming reality. JDH is bringing in special piping from Europe, which Mitchell said takes about 12 weeks to arrive. The company also plans on getting the electricity for its equipment from the Sweetheart Lake hydropower facility that has yet to be built. Still, Mitchell said the closure of this sale marks a significant moment in Juneau’s energy future.

“Juneau’s taking an exciting move toward being a leader in renewable energy and heating development,” Mitchell said, “and we’re pretty excited and I think it’s just one more milestone that we’ve hit in that progress.”